Georgia Becoming Leader in Coffee Consumption Globally

The FINANCIAL -- Georgia,
led by its capital Tbilisi, might soon be one of the world’s biggest
consumers of coffee.

The FINANCIAL -- Georgia,
led by its capital Tbilisi, might soon be one of the world’s biggest
consumers of coffee. Average coffee consumption per capita rose to 1.67
kg in 2013, up from 1.53 kg in 2012 in Georgia. Out of 80 countries
Georgia is 27th, with 0.588 cups per capita. Georgia’s per-capita
consumption of 0.588 cups a day is almost the same as Turkey, Kazakhstan
and Azerbaijan combined.

Georgians appear to be more addicted
coffee consumers than Russians, Spaniards, British and even Brazilians,
according to a U.S. magazine. ‘The Atlantic’ published the results of a
survey offering comparative coffee consumption around 80 countries.

Nigeria with 0.002 cups per capita and China, with 0.003 cups, are the countries with the lowest share of coffee consumption.

According to GeoStat, Georgia imported 8,377.9 tonnes of coffee, worth USD 33,827,000, in 2013. Import of coffee has increased by 10% in comparison with last year’s figure. Annual comparison has shown a significant increase of coffee export growth. In 2013 Georgia exported 109 tonnes of coffee, up from 44.1 tonnes in 2012.

Indonesia (3,587.2 tonnes), Armenia (655.4 tonnes), Vietnam (420.4 tonnes), Russia (189.4 tonnes) and Italy (127.9 tonnes) are the top countries from which Georgia imports the largest share of coffee, with more than 100 tonnes.

With 987.8 tonnes, Singapore is the top importer country of instant coffee in Georgia. It is followed by Russia (565.3 tonnes), Ukraine (526 tonnes), Brazil (352.4 tonnes), Taiwan (168.2 tonnes) and India (127.9 tonnes).

Georgian exporters decided to keep confidential the list of countries to which they re-export coffee seeds. The only available information was regarding the export of instant coffee. Georgia exported 35 tonnes of instant coffee, worth USD 148.8 thousand, to Azerbaijan, and 16.5 tonnes, worth USD 27.6 thousand, to Armenia.

According to Euromonitor International’s country report, regarding coffee in Georgia, Jacobs from Kraft Foods, Pelé from Cia Cacique de Cafe Soluvel and Nescafé from Nestlé remained the top brands in 2013 as they are long established and have strong distribution. They achieved volume shares of 14%, 13% and 13% respectively in Georgia. Jacobs (instant coffee) is perceived as being of the highest quality and most reasonably priced. Nescafé has a very strong brand name and awareness among consumers. Pelé has a more affordable price for the majority of the population. The shares of the three brands increased in 2013 due to the launch of chains of hypermarkets and supermarkets. The brands are imported by financially strong companies which can afford to offer rebates to the chains of hypermarkets and supermarkets in exchange for the best positions on shelves and the right to conduct promotional campaigns inside the respective hypermarkets and supermarkets. This gradually suppressed the smaller companies as they could not afford any discounts for the major retailers.

“The 2013 growth of coffee was the highest growth rate in volume terms over the review period. The significant upturn was attributable to the increased disposable incomes of consumers. Price remained one of the main factors impacting consumer choice in 2013, but there was increasing awareness of more premium brands and the average unit price grew by 7%. At the same time, smaller companies were competing in newly-opened outlets selling unbranded coffee. However, the growth rates of hypermarkets and supermarkets tend to oppress the independent grocers and the small companies are expected to be cleared out of the market as they cannot afford discounting campaigns,” reports Euromonitor International.

According to the report, the forecast period is expected to see coffee sales grow by a CAGR of 4% in total volume terms. The most important factor is expected to be the increased disposable incomes of consumers and their changed tastes and purchasing habits. The trend of instant coffee becoming more and more popular will be observed in the forecast period. This will result in the diminishing popularity of fresh ground coffee in Georgia. Consumers are likely to favour the lower price and increased convenience of instant coffee, and will be further influenced by strong advertising from multinational companies. The fact that fresh ground coffee has, for many years, been traditionally favoured is not expected to prevent its decline in sales, although at the same time, higher-income consumers will probably still select higher-quality fresh ground coffee and, to a lesser extent, coffee pods. The further expansion of specialist coffee shops will impact coffee-culture development. More speciality and Italian coffee varieties are expected to increase in popularity among young urban and higher-income consumers.